2022 Market Report Greater Spokane and Kootenai County - NAI Black
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2022 Market Report Greater Spokane and Kootenai County
Table of Contents Letter from CEO........................................................ 1 Retail .........................................................................3 Industrial ...................................................................5 Office/Medical Office ................................................7 Downtown .................................................................9 Apartments .............................................................11 Investment ..............................................................13 Property Management ...........................................15 CDA/Kootenai County ............................................17 Principals/Brokers/Property Managers................. 20
Letter from
the CEO
After 64 years of our company last year; a record year for the
being in business, 2021 will brokers in our Spokane and
go down in the history books Coeur d’Alene offices. Jeff
as an incredible year! We had Johnson continues to lead our
record sales and leasing and brokerage group. In 2021 we
our transaction volume was promoted Devin Mecham to
up more than thirty percent Sales Manager. Devin brings
higher than a record year in youth, enthusiasm, and great
2019. Due to growing in- communication skills to our
migration and the demand for team. The leading broker in
housing, we completed more our office was my nephew,
residential development land Chris Bell, with a personal and
transactions than at any time company record of production.
in the history of our company. Chris was followed by Steve
We also sold a great deal of Ridenour of our Coeur d’Alene
commercial and industrial land. office and Jon Jeffreys
Investment properties were completing office deals. We also
a hot commodity; cap rates set a record for the two largest
compressed and values went up land transactions ($30 million
more in 2021 than I have seen in range) in our company history.
my 40 years of business. Gone One of those land sales resulted
are the 7% and 8% cap rates in the largest single commission
of the past, and with interest ever paid to our firm. Ninety
rates poised to increase, it will percent of our brokers set
be harder to find great deals for personal records for production.
investors. 2021 will be a benchmark for the
years ahead. Thanks to all of our
We pride ourselves in providing amazing clients who worked with
our clients with a three-legged us on these transactions, and
stool of services. These services kudos to all our brokers.
are superior commercial real
estate brokerage including In property management, Black
consulting, leasing, investment Realty Management, Inc., also
sales and site selection, along had a record year. Tom Hix, our
with property management Vice President of Commercial
and development. Our brokers Operations, retired at the end
specialize in investment, office, of the year and Josh Gutzwiler
retail, industrial, and business was hired to take over his
acquisition services. We did duties. We have the best group
about $300 million in volume of property managers in the
1 | NAI Black Annual Report 2022
Letter from CEO
history of our company. Josh work on different fronts to build
brings a high level of commercial apartments in 2022, and Bryan
property experience from his Walker and I continue to do
former position with a major U.S. subdivision deals. Our firm sold
financial institution. He will be a several different plats to national
great leader for our commercial builders in town looking for lots.
property managers. Our
management company president, We continue to be involved in
Kim Sample, continues to lead civic and charitable causes
the multifamily side of our around the Inland Northwest and
management business. We hired we remain active in the Bite2Go
two new property managers program with Bemiss Elementary
in 2021, and we have grown School.
considerably. We now manage
23,781,395 SF of commercial 2021 will go down as the
property, 3,000 units of year the Downtown Spokane
multifamily, and 386 properties. Partnership, with myself as board
At the end of 2021, we merged chair and past chair, got the new
Jim Koon’s Coeur d’Alene downtown stadium relocated
property management company from the Albi site to downtown
into Black Realty Management, and worked to bring the United
Inc., adding 30 commercial Soccer League to Spokane. We
properties to our portfolio and continue to be active in working
continuing our strong presence with DSP and our City leaders
in Coeur d’Alene. to deal with the continuing
challenges of homelessness
On the development side, we and safety issues downtown.
finished another year working We are also very involved with
on entitlements for the former Boy Scouts of America, Greater
Painted Hills Golf Course Spokane, Inc., the Commercial
property. Hopefully, 2022 will Brokers Association, Trader’s
be the year to move forward Club, Builders Owners and
with this 100-acre project in the Managers Association (BOMA),
Spokane Valley. In addition, we and many other community and
bought 57 acres in the Qualchan industry organizations.
area for a 177-lot residential
plat. We converted the James Spokane and North Idaho are
S. Black Building at First and growing faster than anywhere in
Howard into the 50-unit Marjorie the country and we are poised
Apartments and remodeled to help all of our clients with
the Wave restaurant on the their commercial and investment
first floor. We opened two new real estate needs. Our company
restaurants: Fire and Ice in our is balanced with new, young
Target Center on the South Hill leadership and the old guys
and Takara, a Japanese sushi — myself and Jeff Johnson,
restaurant in Coeur d’Alene. We showing no signs of slowing
also started “build-to-suits” for down. We are working harder
Divine’s Auto and Dairy Queen than ever. I thank all of our David R. Black
at 57th and Palouse Highway. great clients, our brokers, and Chief Executive Officer
Jeff Johnson and I continue to employees for making my job so
enjoyable!
2
Retail
rental rate of $16.80 PSF. most of the retail centers are well
Corresponding, 2018 pre- occupied.
pandemic rates were 9.53% and
$17.09 PSF. Of note, the closed Spokane’s West Plains witnessed
Shopko store at Northpointe is tremendous economic success
currently being re-designed as with the addition of Amazon’s
Stephen Pohl Johnathan Larsen the Esplanade at Northpointe, fulfillment center located near
to open four national retailers the Spokane International
during 2022. Value Village Airport. The vacancy rate is
By Stephen Pohl and has inked a new lease for holding steady at 2.59% with
Johnathan Larsen the former Hastings space at an average rental rate of $17.83
Wellesley and Ash; a relocation PSF. A recent announcement is
Over the past two years, retailers from their current location on the proposed 70,000 SF Builders
have worked hard to deal with Boone. We are now seeing the Supply and Home Center. In
Covid-related issues and adapt market tightening in small space addition, North 40 opened in
their businesses accordingly. leasing, particularly with spaces 2021 at Deerfield and Highway 2.
With governmental mandated for medical service providers. MOD Pizza, Jersey Mike’s, and
closures and the major impacts The North Spokane market is Indigo Urgent Care are slated
of Covid during the years 2020- frequently the preferred venue to open in 2022. The Highway
2021 in the rear-view mirror, for new retailers to plant their 2 retail corridor continues to
retailers are focused on growing first flag and should show steady grow, supported by an influx of
their business in the years absorption in 2022. adjacent new residential projects.
ahead. Tough times can bring
about positive change, and The Spokane Valley experienced The periphery of the Central
despite the loss of a number of a 4.96% vacancy factor with an Business District continues to
businesses due to Covid, many average market rent of $13.55 see growth at the successful
businesses are emerging from PSF. Pre-pandemic measures urban infill project Kendall Yards,
Covid stronger and ready for were 3.87% with a steady $13 as well as in the Gonzaga and
growth. Online retail sales have PSF respectively. New stores University Districts. This area
exploded during the pandemic. opening in 2022 include Aspen is holding steady at a 3.19%
Brick and mortar stores have Dental. vacancy factor, with an average
added health safety protocols rent of $13.65 PSF. Bosco
and expanded “Buy Online and Spokane’s South Hill vacancy Pasta and Panini have recently
Pick-Up in Store”. Restaurateurs rate for 2021 was 13% with opened in the Wonder Building.
have heavily marketed carryout an average rent of $18.33 PSF The Podium, a new 135,000 SF
and delivery options. compared to pre-pandemic rates multi-sports facility developed
of 2.72% and $18.76 PSF. The by the Public Facilities District,
During 2021, the North Spokane major impact on vacancy was is a positive impact to the
market had an 11.55% vacancy the closed ShopKo. Rental rates CBD periphery. In addition,
rate with an overall average on the South Hill are stable and a 5,000-seat stadium by the
3 | NAI Black Annual Report 2022
Retail
Spokane Public School District for a 2022 opening. Wooden Spokane area has created a
81 is expected to open in 2023. City opened its Tacoma-based, renewed interest in the Spokane
The impact of these sporting sit-down dinner venue on market by regional and national
venues will provide enormous Riverside Avenue in the old restaurants. E-commerce will
opportunities for increased 1892 Genesee building during continue its digital sales and
tourism and an increasing the third quarter of 2020. growth, albeit “Clicks and
demand for retail. Those venues bring new dining Bricks” will continue to be
options to downtown Spokane. relevant, leveraging convenience
The Central Business District, and delivery efficiency. Despite
Spokane’s downtown retail In 2022, we will see health the challenges affecting retailers,
core, has an 8.10% vacancy and fitness-related businesses Spokane continues to be an
factor with average rents of such as gyms, yoga, skin care, attractive setting to national
$16.94 PSF. River Park Square and medical service providers retailers due to our growing
is the major retail project on dominate a portion of the population and the reasonable
Main Avenue. Tavolàta, a 5,000 retail landscape. Remote price of new store entry.
SF Seattle-based restaurant, working will continue to be a NAI Black is a retail market
opened in early 2021 in the Old boost to home improvement leader in Eastern Washington
City Hall building. The closed retailing and local hardware and Northern Idaho enhanced
Luigi’s restaurant is slated for stores. Sustainability and by its NAI Global network of
lease to a national restaurant a focus on renewable items independently owned companies
operator specializing in have driven expansion of in 48 states and 43 countries.
breakfast. The Maracas Mexican thrift stores such as Goodwill
Grill has recently been leased and Value Village. Continued
to Boiada Brazilian Grill, slated in-migration to the greater
4
Industrial
A Story of Continued Development and Inventory Shortages
Lease Rates and Shortages Land Sales
Overall, market conditions from 2021 saw Spokane tear through
2020 to 2021 saw an increase our inventory of almost all
in lease rates, sales prices, and buildable sites. It was once said,
overall inventory. CoStar reports based on absorption rates, the
Darren Slackman, SIOR Drew Ulrick, SIOR
the Spokane County area saw Spokane market had over a 100-
an overall increase of two million year inventory of land. Based
square feet of new construction, on 2021 numbers, those days
By Darren Slackman, SIOR putting the Spokane market at are over. Smaller buildable sites
and Drew Ulrick, SIOR 45.1 million square feet. Even sold from between $4 PSF up to
while adding considerable new $6.75 PSF. The larger tracts of
construction to our market, the land (10 acres +) sold between
vacancy rate reduced from 3.2% $3 PSF up to about $4 PSF.
Development has down to 2.8% in 2021. Over The most notable tract of land
continued to be the this same period, the average sold in 2021 was a binding site
big topic of discussion rental rate increased from $0.58 plan put together in Spokane
in the local industrial PSF up to $0.63 PSF blended. Valley by Centennial Properties.
market. With the massive In terms of new construction, Centennial put together a BSP
influx of population and we still see landlords separating of 20 lots and extended Garland
companies looking to be lease rates from office and Road from Barker through to
more efficient with their warehouse. New construction Flora. Altogether, 156 acres of
real estate, Spokane has is typically asking $0.70 PSF buildable lots were sold between
flourished. Nationally, for warehouse, and office rates fourth quarter 2020 and year-
Spokane still has very can range from $1.25 and up end 2021. Most significantly,
attractive lease rates depending on build out. The Panattoni purchased 103 acres
and land costs. With smaller flex bays have almost for the second of five Amazon
employment still being zero available options and the distribution locations in our
efficient from at home, few transactions in 2021 saw market. Other notable land sales
employers are more willing lease rates pushing $1 PSF per include 45 acres purchased by
to move manufacturing month. The largest players in Panattoni at the Medical Lake
and distribution to tertiary new construction in 2021 have interchange for the fifth Amazon
markets like Spokane. been Amazon (1.3 million SF), distribution location, 39 acres by
Douglass Legacy Park (150,000 Crown West, LLC along North
SF), Spokane Industrial Park Barker Road, and 92 acres
(240,000 SF), and AT Industrial purchased by MMC Investments.
(187,000 SF). Several more
projects will be available in
2022: Amazon (250,000 SF),
Barker Logistics (130,000 SF); AT
Industrial (208,000 SF) and LB
Stone Properties (51,000 SF).
5 | NAI Black Annual Report 2022
Building Sales
2021 reached a new highwater
mark in multiple industrial
categories. None more
impressive than building sale
values. Two years ago, building
price per square foot was
typically around $60. This year
we have seen multiple single-
tenant end user sales in the
$100 PSF range. CoStar reports
the average industrial building
sold at $97 PSF in 2021. We
believe this has been fueled by
continued low interest rates and
an increase in construction costs
brought on by inflation and labor
force shortage. With a shortage
of available properties for sale,
many clean move-in ready
buildings are receiving multiple
offers further inflating prices.
2022 Forecast
NAI Black and our partners
expect another year of rent
growth. With limited supply
and waning land opportunities,
we anticipate a slowdown in
transactions and new tenants.
Already we see tenants not
having quality options in the
market and terminating their
searches. The bulk of product
available is very large, leaving a
void of flex space between 2,000
SF up to 10,000 SF. We see the
flex arena as a target for local
investor projects.
Industrial 6
Office - Medical Office
2022 subject to increasing projects completed and very
interest rates. few large office building sales
in 2021 in the North Spokane
The CBD (Central Business market. 777 East Magnesium
District), comprised of close Avenue containing 100,000 SF
to 3,000,000 SF of Class A, B, sold for $11,300,000 to Spokane
Jon Jeffreys, SIOR Matt Walsh and C office space, saw overall International Academy. There
vacancy increase from 2020 were a handful of smaller office
levels at 15.03% to 17.34% buildings that sold but sales
By Jon Jeffreys, SIOR
at the end of 2021. Class A activity was down over 2020 due
and Matt Walsh
vacancy increased from 14.21% to lack of available product.
to 16.36% and average rental
In 2021, the Spokane office
rates rose to $20.67 PSF per Spokane’s South Hill office
market saw a slight increase in
year full service. Class B market saw a decrease in
office leasing activity compared
vacancy increased from 15.52% vacancy in 2021, from 4.18%
to 2020, a year which Covid
to 18.75% with an average rental to 2%. Recent rental rates
shifted employer’s use and
rate up slightly from 2020 to were up slightly to $20.16 PSF
need for physical office space.
$16.96 PSF per year full service. per year full service. There
Remote employment has
Class C vacancy improved from were numerous smaller leases
become an option that will
2020 going from a vacancy rate completed which easily impacted
probably remain long past any
of 15.55% down to 9.89% with absorption in one of our smallest
pandemic concerns. As a whole,
the average rental rate increasing submarkets.
rents and vacancy rates held
to $13.68 PSF per year. Tenants
relatively flat in all submarkets.
in the market continue to The Spokane Valley/Liberty
There was little activity with new
be drawn to properties with Lake submarket held steady
users coming into our office
amenities such as ground floor at 11.04% vacancy, slightly
market from out of Spokane.
retail, exercise facilities, and improved from 11.68% the
Existing office users either held
on-site parking. Due to obsolete year prior. Average rental rates
steady or took time to upgrade
building systems, vacancy, and were $15.45 PSF per year full
their office space in a move we
low rental rates, we continued to service. The Spokane Valley
are calling a “flight to quality”.
see Class C CBD office buildings was similar to the rest of the
Call center/back-office space
be converted to multifamily. Spokane submarkets where
with a high number of employees
There were a few large sales in sales dominated the headlines.
in close proximity created
the CBD: 110 North Post (the 12410 East Sinto, a 34,500 SF
challenges during the pandemic.
Peyton Building), a 120,000 SF medical office building, sold for
The shift of those employees
building, sold for $11,400,000; $11,600,000 (the Buyer in this
working remotely has resulted in
and 41 West Riverside, a transaction was represented
some large vacancies starting to
58,000 SF building, sold for by Jon Jeffreys and Darren
hit the market.
$13,500,000. Slackman of NAI Black). 16009
East Indiana, a 13,600 SF new
Sales activity, on the other hand,
North Spokane was a bright construction medical office
had a very strong year with users
spot in the office leasing building, sold for $7,771,000.
taking advantage of low interest
market. Vacancy rates in the 1334 North Whitman Lane
rates to buy. Ground up office
North submarket dropped in Liberty Lake, a 25,500 SF
construction was minimal due to
to 7.90% from 8.68% a year medical office building, sold for
the rising costs of construction,
prior. Average rental rates are $7,650,000.
which in turn increased the
currently $16.90 PSF per year
demand and value of existing
full service. There were no The medical office market
office buildings for sale. This
new notable office construction improved with the current
trend should continue through
7 | NAI Black Annual Report 2022Office-Medical Office
vacancy now at 7.83%, down
from 9%. We saw good leasing
activity in 2021 with medical
tenants getting through the
required government shut down
in 2020. Rental rates for existing
product remained flat with new
construction pricing beginning to
put pressure on those numbers.
Medical office is one of the
office sectors that continues to
see new construction build-to-
suits and owner-user projects.
Medical office sales were a
large majority of the sales in
the office and medical office
sector in 2021. There were
a few notable medical office
building sales: 4102 South
Regal, an approximate 32,000
SF building with a mix of office
and medical office tenants, sold
for $8,450,000; and 3010 South
SE Boulevard, an approximate
18,000 SF medical office
building, sold for $4,000,000,
with Jon Jeffreys of NAI Black
representing the Buyer. With
a large regional pull, multiple
medical schools, low vacancy
rates, and a growing population,
we will continue to see medical
office be the darling of the office
market.
As far as the outlook for 2022,
companies with leases coming
up for renewal may consider
downsizing their space as
a result of the Covid shift to
remote working. That said,
many employees look forward
to returning to the office, post
Covid, to maximize collaboration
and enjoy their business culture.
The Spokane office market
appears to be on a steady
course for 2022.
8Downtown
property owners are focused add much needed downtown
on long term ownership, those housing whose residents will give
who have sought to sell have downtown dining, shopping and
found a large pool of potential entertainment venues a needed
buyers with cash. These cash post Covid boost. Combined
buyers are focused on making with major public projects
Mark McLees Jason Dolloph CPM®
low-leverage, long-term completed and in process,
investments. This type of buyer downtown remains on an upward
has not been in our market on trajectory.
By Mark McLees and such a large scale since 2003 to
Jason Dolloph, CPM® 2007 when visionaries invested
in and redeveloped many of
As predicted last year, the downtown’s historic buildings.
downtown Spokane real estate With the majority of downtown’s
market has remained steady and historic buildings refurbished,
strong. With low vacancy rates we are beginning to see the
(excepting office) and available next wave of development being
spaces being filled seamlessly completed by large developers
at lease rates adjusting upward from outside of Spokane. These
and stable heading into 2022, developers are constructing and
property values remained proposing mixed use projects
healthy and strong through with first floor retail and housing
2021. Although many downtown above. These projects will
9 | NAI Black Annual Report 2022The impact of a couple of the most recent public projects The private sector
that will shape 2022 and beyond are: investments into downtown
Spokane have been
1 The long-awaited 5,000 seat outdoor sports Stadium --
the future home of a professional soccer team, football
games, and a variety of other events. This $31M project was
significant, with transactions
such as the following at the
forefront
scheduled for development outside of downtown; however, of positive expectations
with the efforts of Mark Richard (DSP) spearheading the effort for the future:
to gain public support and cooperation between Spokane
Public Schools and Spokane Public Facilities District, it • Parkade, a 374,000 SF,
allowed developer Dave Black (NAI Black), real estate brokers 963-car parking garage sold
Mark McLees (NAI Black) and John Powers (NAI Black), to for $6,950,000 and will be
broker the sale of multiple properties totaling $7.8M and 3.5 maintained for another 50+
acres, which was the final piece of the puzzle to make way years of operation.
for relocating the Stadium to downtown. This new project,
• Historic Bennett Block, a
along with its neighbor The Podium (an indoor track, field,
54,000 SF fully renovated
basketball, volleyball, and martial arts stadium) and the
historic mixed use property
Spokane Arena, offers an incredible opportunity for Spokane
along with the 125-
to host innumerable sporting and entertainment events never
car parking lot sold for
before imagined. The economic impact that these venues
$13,000,000.
will have on downtown Spokane will be significant. The
connection between the sport complexes and downtown is • Historic Peyton Building, a
the newly renovated Riverfront Park, a spectacular walk and 98,000 SF fully renovated
visit in the core of all that is happening downtown. historic mixed use property
for $11,400,000.
2 Another significant public project is the nearly complete
University District infrastructure improvements. Not only
are these improvements of extreme value to private real estate
• Bank building on 41 West
Riverside.
investors, developers, and property owners, but the East • 1520 West 3rd, a 31,000
Sprague, Spokane Falls Boulevard, and MLK arterials offer the SF office-bank building for
most beautiful and visually pleasing drive in all of downtown. $4.85M.
Once the Hamilton and Trent bridge is completed, the future
• The Davenport brand
vision of all of Spokane will begin to unfold with future
hotels (Historic Davenport,
undeveloped or underdeveloped properties soon experiencing
Davenport Tower, Davenport
new life. Properties such as:
Lusso, Davenport Grand,
and The Centennial)
• Iron Bridge (5.9 acres undeveloped land).
consisting of nearly 1,800
• 130 East Sprague, sold as an investment for guest rooms sold for
redeveloping. approximately $400M. The
confidence in the returning
• A rare 2-acre developable site just sold for $50 PSF
populations for hospitality
in the Southern U-District, Healing Rooms, that is an
needs is increasing daily.
income producing asset with multiple redevelopment
With convention goers
opportunities to pursue in the future.
coming back and sporting
• 206-214 West Riverside, $35M apartment complex, events trickling in with its
139-units. spectators, the hotel industry
will see a tremendous boost
• 288 unit apartment building nearing completion at 501
in stays in 2022.
East Sprague.
• The District – Riverbend, a $45M, 298-unit apartment
complex.
• Spokane Falls Boulevard/Trent and Hamilton:
a) McKinstry 4-story new tech office building, SWC
Spokane Falls and Hamilton.
b) North Hamilton and east to Spokane River planned,
pending, and future redevelopment envisioned.
Downtown 1011 | NAI Black Annual Report 2022
Apartments
Apartments
Multifamily sales volume in 2021 So, what’s in the wings
was 39% over 2020 numbers. for 2022?
Multifamily investments closed
sales transactions totaled
With increasing in-migration, a
$152,776,800 in 2021 compared
dwindling supply of multifamily
to 2020 with closed sales of
development land, low interest
$94,131,900. Additionally, the
Mitch Swenson James S. Black III rates, and the rising cost of
CCIM CCIM number of units traded was up
single-family homes, the demand
12% from 898 units changing
for multifamily rentals should
By Mitch Swenson, CCIM hands in 2020 to 1,024 units
remain strong for the foreseeable
and James S. Black III, CCIM closing escrow in 2021.
future. The multifamily market
will be further strengthened by
The most notable aspect of
Multifamily Sales Report for the lessening effects of Covid-19
the 2021 data comes from the
Year 2021 (we all hope) and the end of
substantial increase in price
governmental-related restrictions
per unit of closed multifamily
2021 saw multifamily sales on landlords.
transactions. The price per unit
come out of the 2020 Covid-19
jumped from $104,824 in 2020 to
pandemic with a roar. Sales
$135,391 in 2021, with a number
of apartments in the Spokane
of transactions over $200,000 We foresee investors
market increased dramatically
over 2020 with many out of town
per unit! This is a 23% increase in the multifamily asset
in price per unit from 2020. class continuing to enjoy
investors “finding” Spokane!
Many landlords capitalized on excellent returns in the
Cap rates remained low over this
the ending of Governor Inslee’s
past year. Interest rates have years ahead.
emergency “NO EVICTION/NO
remained low as well, but this
RENT INCREASE” mandate this
may be coming to an end as the
past fall to reposition assets by
10-year Treasury appears to be
increasing rents, thus allowing
on the move.
for increased property values.
This, combined with the very low
Competition is fierce to acquire
capitalization rates and many
quality assets. This competition,
out of town investors, made for a
low inventory, and high investor
robust market.
demand coupled with the
availability of very affordable
Not an overly large number of
financing fueled the large jump in
transactions closed escrow in
price per unit in 2021.
2021, but the sales that were
consummated were at record
prices for the Spokane area
marketplace.
1213 | NAI Black Annual Report 2022
Investment
Other items that weigh in are identified, they are probably
length and type of lease. Most not going to sell. Spokane has
investors prefer a NNN lease with always had a buy-and-hold
all or the majority of the ongoing attitude, with many purchases
maintenance and upkeep being done with the monthly income
the responsibility of the tenant. component as a primary driver.
Investors are looking for as much Long-term buy-and-hold
Jim Orcutt Devin Mecham CCIM
certainty as possible with regard has been the most common
to the income stream produced investment strategy over the
By Jim Orcutt and by a property. years in Spokane.
Devin Mecham, CCIM
Investor money continues to
The investment real estate flow to the Spokane area. We
We anticipate continued
market remained strong locally have been involved in multiple
and regionally in 2021, with transactions with investors who strong demand for
many contributing factors. are either moving to Spokane investment real estate with
Historically, low interest rates or they like the economic investors working hard to
to fund acquisition and very outlook of our region and are find suitable product for
few options for investors buying anticipating continued their portfolios.
looking for quality income appreciation in our market. As
streams kept the pressure these investors are discovering,
on. Bank returns on CDs and rates of return in the Spokane
money market funds continue market are higher than they are
to be less than 1% and the competing for in their home
stock market has a strong air markets so they are willing to
of uncertainty. pay more for assets than our
local investor pool has become
There is expectation that the accustomed to.
Federal Reserve will start
increasing interest rates in 2022 Supply constraints continue.
in an attempt to rein in inflation. Investors still find far less
This would pressure cap rates to product available than the
rise, as borrowing costs would current demand would absorb.
increase. Cap rates stayed very Sellers are reluctant to sell with
low in 2021. We were involved in few exchange opportunities
multifamily investment deals in readily available. Most sellers
the 3% range, with nonresidential are not receptive to selling
commercial investments trading and paying capitol gains taxes
in the 4.5% to 6.5% range. Some to the federal government.
of the variables include quality, Consequently, unless sellers
age, and location of the property. have an exchange property
14Property
Management
our clients and tenants, resulting
in high employee/tenant/
client retention; insightful and
detailed operational, strategic,
and financial planning; and
exceptional communication
Kim Sample ARM Josh Gutzwiler
with all stakeholders. We
strive to optimize both gross
and net operating income
By Kim Sample, ARM while maintaining the physical
and Josh Gutzwiler infrastructure to preserve the
income streams over the long-
Black Realty Management term and enhance property
is a leader in the multifamily values.
and commercial property
management field with a large Our philosophy has earned
portfolio managed throughout us the reputation of an
Washington, Idaho, Utah, entrepreneurial leader in the
Oregon and Montana. management field. Each
property we manage requires
Our property management individual treatment as a uniquely
team is a group of specialists distinct business enterprise
who are dedicated to providing that is operated pursuant to the
excellence and exceeding client objectives and instructions of the
expectations. We deliver a property owner. We customize
platform designed to provide each property’s operating
comprehensive, long-term, procedures and strategy to
profitable client services. address the short-, mid-, and
long-term goals of the property
Our management company is the owner. The highest compliment
only Spokane firm to have been we receive from our owners
designated as an Accredited is referrals to other property
Management Organization® owners in need of our services.
by the Institute of Real Estate
Management, demonstrative Our clients are the reason
of its management expertise, we are here and have been
professional competence, in business since 1958. If
financial responsibility, integrity, we continue to be successful
and ethics. in meeting the needs of our
clients, our company will
Our property management team remain on a path of growth and
is focused on quality service to prosperity.
15 | NAI Black Annual Report 2022Property Management
Our commitment to success is a
combination of our core values
which are:
• Pursue excellence in all we do.
• Hire and develop great people.
• Keep our promises and honor our commitments.
• Embrace change as an opportunity.
• Enjoy the work we do.
• Respect the environment and support green
initiatives.
• Make a profit for our clients and ourselves.
• Be a dynamic contributor in our community through
ongoing charitable giving, civic involvement, and
active participation in local city, state, and regional
associations.
To learn more about the value and benefits of our property
management services and how we can assist you in
reaching your goals, please call us at 509.623.1000.
16Coeur d’Alene -
Kootenai County
and Rathdrum driven by the $12 PSF NNN for Class A small
completion of the Highway 41 format buildings. The industrial
widening. Medical and medical- vacancy rate of approximately
related office will account for the 1% will spur new construction
majority of office activity in 2022. activity in 2022. The following
The vacancy rate going into 2022 are major project areas which
Steve Ridenour Jim Koon sits at approximately 2.5% of the will make an impact on the
4,000,000 SF of GLA in Kootenai market going forward:
County. We expect rental rates
By Steve Ridenour and to remain in the $12 to $20 /
Jim Koon PSF blended range for existing
office to upwards of $26 to $30
2021 brought unprecedented PSF NNN for new medical office
population growth and construction.
increases in real estate values
to North Idaho. Cash continues Industrial
to pour in from out of state
home buyers, investors, and Substantial land acquisition
businesses seeking a more and planning for new projects
favorable North Idaho business occurred during 2021 with many
climate. With continued in- construction starts scheduled for
migration and population 2022 in response to low vacancy
growth, 2022 should be and a lack of inventory. The rush
another successful year for the for industrial land has pushed
North Idaho real estate market. land values to, or exceeding,
Here is our perspective on the those in neighboring Spokane
various market sectors. County. Pricing has increased
over 2020-21 values at least
Office 30% and, in some cases, smaller
industrial parcels have more
The office market reflects the than doubled in price. Expect
national trend of downsizing larger parcel pricing in 2022 to
and remote work; however, range from $3 to $4 PSF and $6
many North Idaho businesses to $10 PSF for smaller parcels
have returned to the close to transportation corridors.
workplace. The office market Rental rates have increased
is stable and has not seen any substantially in response to a
significant new office building shortage of building inventory,
development. 2022 will see which range from $6 PSF
limited development in Post Falls modified gross for Class B to
17 | NAI Black Annual Report 2022Coeur d’Alene - Kootenai County
Inland Northwest Tech Park Rathdrum Industrial to occur as the City of Rathdrum
(INTP) becomes an industrial location of
Industrial development in the choice in 2022.
The land for this designated tech City of Rathdrum has progressed
park was purchased in August and includes projects near the Riverbend Industrial Park
of 2021 from GVD Commercial Highway 41 corridor. 2021 saw
Properties by Douglass 100 acres absorbed in the GVD Most of Riverbend’s acreage has
Properties. This 300-acre Rathdrum I Industrial Park with been absorbed. It still offers the
project will start construction a new headquarters facility occasional vacancy or sublease
in 2022. Plans range from large announced by Kootenai Electric opportunity for users that require
format distribution to incubator Cooperative and a distribution immediate proximity to the I-90
tech industries, with INTP warehouse for a major retail corridor at the Idaho/Washington
having access to rail service company. GVD’s companion state line. Interior land pricing
from an existing Union Pacific rail 200-acre Rathdrum II Industrial from $6 PSF.
spur. Details for the development Park has received multiple
of this property are yet to be proposals totaling over 100
announced but will probably acres from businesses relocating
include office, retail, from out of state. Expect more
and mixed use. annexation and industrial zoning
18CDA- Kootenai County
The Pointe at Post Falls candidates”. These factors could Athol Crossings Center acquired
lead to a continued shortage of Sweet Lou’s, Northwest Special
Located at the Beck Road/I-90 needed new multifamily housing. Hospital’s clinic and OSSM
Freeway Exchange, The Pointe orthopedic clinic, Jitterz coffee,
saw UPS open a new facility in Retail Grease Monkey, a 34-unit higher
2020 and Crown Enterprises, density residential development,
a Michigan company, is under Pent up demand and new and is in negotiations on
construction on a 16-acre residential growth areas will numerous other pads and
distribution/truck terminal facility. drive the retail and retail service outparcels.
Wadsworth Development Co., market. The “work from home”
the owner of the project, is in and “back to downtown walking Investment Properties
plan check for two additional lifestyles” will result in continued
distribution buildings totaling infill in the downtown and Investment grade properties
over 200,000 SF, which are midtown areas of Coeur d’Alene sell as quickly as they come to
slated for construction in 2022. and Sandpoint. To a lessor market due to the continued
Wadsworth completed a 20,000 extent but still meaningful, the demand and scarcity of product.
SF flex building in 2021, which core areas of Hayden, Post Falls, All categories of the market are
is in negotiation for 100% and Rathdrum will continue to selling with multifamily being at
occupancy. Once Wadsworth’s populate with local businesses the top of the list. Multifamily
new construction is completed, and merchants in a niche effort for-sale product is virtually
The Pointe at Post Falls will be to compete with online retailing. non-existent and rare examples
out of industrially zoned land. of sales are in the 3.5 to 4 cap
The most significant impact rates. Quality retail properties are
Coeur d’Alene Commerce Park in retail will occur along also in demand with cap rates
the Highway 41 corridor in in the 4 to 5 range followed by
While Coeur d’Alene is not as response to the major Highway industrial investments in the 5
“industrial rich” as Post Falls, 41 expansion and substantial to 7 cap rate range. Office and
it is still an important part of new residential development medical office buildings are in
the conversation. Especially in that area. Leading the way high demand if they have credit
for companies who do not will be Prairie Crossing, a GVD tenants on long term leases with
require immediate highway or Commercial Properties 50-acre cap rates in the 4.5 to 6 range.
freeway access and want to be shopping center and mixed use If out of state cash continues to
in Coeur d’Alene. Coeur d’Alene project located at the NEC of flow into North Idaho and interest
Commerce Park is a high-quality Highway 41 and Prairie Avenue. rates remain relatively stable, cap
development with very high Initial anchors, Super 1 Foods rates will remain low.
occupancy. Pricing from $6 to $8 and Peak Fitness, have been
PSF. announced and grading of the Forecast
site has begun. The project will
Multifamily also provide buildings and land With low vacancy rates, solid
for additional retail, as well as demand for land, and rental
Multifamily continues to be the restaurants, service businesses, space in all sectors of the
hottest investment real estate and medical office users. commercial real estate market,
category but a scarcity of zoned Following Prairie Crossing will be all of North Idaho is poised to
multifamily land and a change other commercial developments perform well in 2022.
in governmental policy could in the Highway 41 corridor on the
slow development. November drawing board.
2021 elections saw many city
council incumbents lose seats Not all development will be
and being replaced by “slow to confined to Kootenai County.
no multifamily residential growth In 2021, the Super 1 anchored
19 | NAI Black Annual Report 2022Principals/Brokers/Property Managers
Dave Black CCIM, Jeff Johnson CCIM, Kim Sample ARM Josh Gutzwiler Holly Poquette CPA
SIOR, CEO SIOR, President, Brokerage President, Management Vice President, Management Chief Financial Officer
Christopher Bell SIOR James S. Black III CCIM Derek Budig Jesse Clark Jason Dolloph CPM®
Stephanie Fromont Julia Guinn Don Jamieson Jon Jeffreys SIOR Brent Johnson
Human Resources Director
Jody Johnson Adam Kammarcal Mary Kay Knudsen Jim Koon Johnathan Larsen
Corporate Operations Director
Jeff McGougan Mark McLees Devin Mecham CCIM
Sales Manager Jim Orcutt Mark Pinch CCIM
Stephen Pohl John T. Powers III KC Reese Steve Ridenour Darren Slackman SIOR
Mitch Swenson CCIM Drew Ulrick SIOR Bryan Walker Matt Walsh
20801 West Riverside Avenue, Suite 300 Spokane, WA 99201 509. 623.1000 105 North 1st Street, Suite 300 Coeur d’Alene, ID 83814 208. 665. 6475
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